Cyber-fraud account freezes must be proportionate, preserving only the disputed amount while releasing the remaining balance.

The petitioner sought removal of the hold/debit freeze on his AU Small Finance Bank account and permission to operate it, including restoration of his retailer ID.

He relied on Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, and on the Standard Operating Procedure (SOP) discussed in Archana v. State of Madhya Pradesh & Ors.

The Court identified Rs. 19,300 as the disputed amount and considered the earlier decisions applicable to the case.

1. Whether the account freeze should continue in full, or whether the identified disputed amount of Rs. 19,300 could be secured separately while allowing the petitioner to operate the account.

2. Whether the disputed amount should remain secured pending action by the competent Judicial Magistrate under the relevant provisions of the BNSS or other applicable law.

The Court applied Malcolm Murayis, which directed that disputed amounts be kept in fixed deposits pending orders of the competent Judicial Magistrate, with release to the account holders if the investigating agency failed to proceed within the prescribed period.

It also applied Archana, which considered the Ministry of Home Affairs’ SOP dated 10 April 2026 and emphasized proportionality in account freezes, preservation of only the suspected amount where sufficient, and use of the prescribed grievance mechanism.

The Court stated that these decisions applied mutatis mutandis.

The Court treated the disputed sum of Rs. 19,300 as capable of being secured separately and applied the proportionality approach reflected in Archana, alongside the directions in Malcolm Murayis.

It therefore considered that securing the disputed amount in a fixed deposit would protect the investigation without requiring the entire account to remain frozen.

The Court left open the possibility of further action by the bank if another complaint concerning a different entry were received, subject to the SOP and applicable law.

The amount may be liquidated only after an order by the competent Judicial Magistrate within three months; if no such order is passed within that period, the petitioner may withdraw the fixed-deposit amount after informing the police agency.